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Currently, the head effect of the community group buying track has already appeared. Coincidentally, just like the O2O war in the past, the two head players prospered and selected, and Tencent and Alibaba also stood behind the Tencent Group. The difference is that this time, the giant also went into the water to fish.

2018, 2019: tightening after running wild

Some people think that 2018 may be the first year of community group buying. Whether it’s entrepreneurial players or capital, in 2018, this track is extremely lively, and there are countless community group buying players who have received investment.

According to the financing inventory of the new distribution “Community Group Buying Industry Report 2018-2019”, it can be seen that the players entering are distributed in the Yangtze River Delta, Beijing, Hunan, and even Shaanxi and Jilin. At the beginning, the overweight capitalists are also strong: IDG, GGV Jiyuan Capital, Jingwei Venture Capital, Zhene Fund; Tencent Industrial Fund, Pinduoduo and other CVCs have also appeared.

(New distribution “Community Group Buying Industry Report 2018-2019”)

The prototype of the community group buying model originated in Hunan. The community’s “group leader” (usually Baoma or convenience store manager) collects orders in the community, and then directly picks up the goods from the fresh market, and the community residents directly Pick up the goods in the small area, and the group leader draws a commission from the order sales.

In this scenario, the main goods in the community group buying are fresh products, which were later expanded to the general merchandise category. To be honest, the threshold for community group buying is not high, and it is the high-frequency consumption scene and the easy-to-copy model that made community group buying expand dramatically in 18 years.

On the one hand, some people think that community group buying means grabbing the leader and occupying the community. Some investors said, “10% of the head of the leader contributes about 90% of the sales share, and each leader is equivalent to Get a community”.

On the other hand, the test of community group buying is the supply chain capabilities, such as SKU polishing, warehousing, logistics and distribution capabilities. And many e-commerce companies with supply chain advantages are naturally not a problem and cannot be left behind.

E-commerce companies such as Suning and JD.com have even personally entered the circuit to participate in this track. Suning launched Su Xiaoning in 19Recruiting 100,000 delegation leaders across the country, covering 20,000 community spots, in addition to fresh daily necessities, including 3C digital major appliances, clothing department stores, etc.; JD.com also launched “Youjia Shop”, positioning “JD.com directly affiliated community group buying platform” , And JD.com uses its supply chain advantages to launch “Jingweili” to provide community group buying solutions.

However, in 2018, most players’ financing was concentrated in the Angel round or A round, and there were very few financing rounds B and above. This also shows that the capital market was still on the sidelines at that time.

By 2019, the shrinking of capital is obvious. According to the conclusion of QuestMobile Research Institute, in 2018, community group buying platform financing exceeded 4 billion yuan; but this number has become less than 1.5 billion yuan by 2019. On the one hand, this is related to the investment environment in 2019. On the other hand, in 2019, community group buying players have been merged, transformed, and went bankrupt, and few have survived.

For example, Squirrel Fighting has received much media attention. Its founder Yang Jun, as an early employee of Meituan, has helped Squirrel Fighting to grow rapidly in the early stage, and it has become the number one in six months. In the echelon, IDG Capital, High Collar Capital, Yunjiu Capital, etc. have also entered the market in large numbers. But after a year of leaping forward, Squirrel Pinpin suddenly heard news of layoffs and bankruptcy. It is reported that the squirrel is fighting to lay off employees because the acquisition is unfavorable with you, me, and you, and the financing fails.

Outstanding dark horse

Community group buying players encountered a cold in 2019, and by the 2020 epidemic period, they encountered the first turning point. Under the epidemic, the offline blockade of vegetable farms and supermarkets has increased the demand for fresh department stores of community residents, and community group buying platforms have come to show their skills.

From the current point of view, the community group buying players who are in the forefront and most favored by capital are the impromptu selection and shihui groups. According to the Aladdin applet index in March and June, the community group buying track, Prosperity Optimal Group always occupy the top spot, with Tongcheng Life and Shihui Group following closely behind; followed by Shixianghui and Meijia Shopping.

It is reported that the “Ten Hui Group” was established in May 2018, with the community as the entrance, aiming at the daily consumption scene of the family and cutting into group buying. In 2019, Ten Hui Group announced its merger with you, me, and you. Since then, the edge of the Ten Hui Group has become more and more obvious. At present, the Shihui Group has covered more than 100 cities and 100,000 communities.

The epidemic has given the Shihui Group, a major town in Wuhan, an opportunity to grow. In March, Shihui Group announced that GMV exceeded 500 million; in April, it increased by 30% month-on-month, GMV exceeded 650 million yuan, and the peak daily orders reached 1.6 million. In terms of user growth, according to publicly available data, the number of new paying users in the Tenhui Mission in February and March this year has increased by 4 to 5 times compared to January.

The financing of Shihui Group will be smoother in 2020. Three rounds of financing have been completed in seven months:

In January, the Ten Hui Group announced the completion of a new round of 8Investors in the US$8.3 million financing include Joy Capital, Alibaba Capital, Qiming Venture Capital, Zhen Fund and Huachuang Capital.

In May, Shihui Group completed the C1 round of financing with an amount of US$81.4 million. The investment was led by GGV Jiyuan Capital. Joy Capital, Qiming Venture Capital, Chece Capital, Gaohu Capital followed the investment, and Gaohu Capital served Exclusive financial advisor.

On July 29, Shihui Group announced the completion of a $80 million C2 round of financing. This round of financing was led by CDH Investment, with GGV Jiyuan Capital, Changce Capital, and China Central Bank International following the investment. Gaohu Capital acted as the exclusive financial advisor.

Among them, Yuyue Capital, Qiming Venture Capital, and Changce Capital all participated in the investment three times; Alibaba and GGV Jiyuan Capital Zhenge Fund participated in the investment twice.

Another not-to-be-neglected player is the Prosperity Optimum who completed $800 million in July.

Xingsheng Optimal is incubated by the Hunan chain convenience store brand “Furong Xingsheng”. Based on the advantages of the original supply chain and offline stores, it adopts a warehousing and logistics system of “shared warehouse-B2C warehouse-distribution site-store”. There are many behind it. Star capital blessing:

• In September 2018, “Prosperity Optimal” received tens of millions of US dollars in Series A investment led by Xu Xin from today’s capital, Jinshajiang Venture Capital and Zhen Fund.

• In May 2019, Tencent participated in Xingsheng Optimal’s A+ round of financing.

• In July 2019, Prosperity Optimal received a US$40 million financing from KKR.

• In September 2019, Xingsheng Optimal completed a US$200 million Series B financing.

• On July 22, 2020, Xingsheng Optimal completed a $800 million C+ round of financing. The lead investor is KKR, followed by Tencent, Sequoia China, and Tianyi Capital.

A careful analysis of the investors behind it shows that Tencent and KKR have appeared many times. KKR Group was founded in 1976, private equity investment is its core business, and its private equity market has assets under management of US$102 billion. It is reported that KKR Group began to enter the Asian market in 2005 and currently has more than half of its investment in agriculture and food safety in China.

When players on the same track lay off or transform, it is also a time for Prosperity to run wild. In 2019, Xingsheng selected an average daily order of 7 million orders, and its GMV in 2019 reached 10 billion yuan. Moreover, its annual growth rate was 1250% year-on-year. It is this growth rate that supports the persuasive power of Prosperity Optimal to investors.

Capital, giants and small giants

For the Shihui Group, the merger of “You and MeYou” is a very important part. Squirrel Fighting has increased the cost due to its failure to acquire it, but the successful merger of Shihui Group will make Xin Shihui Group a step forward in scale, which is beneficial to investors and the market. Stronger persuasiveness, win in 2019.

It is worth noting that Shihui Group also announced after obtaining financing from Alibaba in 2019 that Shihui Group has become an important partner of Alibaba’s sinking strategy. Alibaba’s community new retail Internet service platform Lai Tong has planned to invest in 1,000 small stores as an in-depth pilot for upgrading its community group buying business in offline stores.

However, the giants are not satisfied after investing in horse racing, and they have to step in and do it themselves.

According to media reports, in July, Alibaba’s retail business department has begun preparations for the establishment of a new community group buying department. The person in charge Zou Zhijun is P10 and reports to Lin Xiaohai, general manager of the retail business department. It is reported that community group buying is only part of the business of this new department, and the final form of community group buying in Ali retail is still unknown.

In addition, it is worth mentioning that Zhen Fund has a wide range of community group buying tracks, and it also appears behind Xingsheng Optimal Group, Shihui Group and Tongcheng Life. In addition to supporting Prosperity and Optimizing, Tencent has also increased the City Life and Food Sharing Club. In addition, there are many small giants entering this track.

On July 7, Meituan issued an organizational adjustment announcement stating that in order to further explore the community’s fresh food retail format and promote the accelerated integration of fresh food retail online and offline, it will establish a “preferred business department” and enter the community group buying track. Chen Liang, senior vice president of the regiment and member of S-team, is in charge.

Didi, which has had a feast with Meituan, also began to quietly make arrangements in June. It is reported that Didi invested in Chengdu “Orange Heart Optimal”, which was established in May. At present, the orange heart optimization has covered the standard products such as fresh food, grain and oil daily use.

In June of this year, the president of Cainiao announced that in addition to sending and receiving express delivery, Cainiao Station also provides services such as group buying, laundry, and recycling. There is no doubt that the Cainiao Station, which is already occupying a spot in the community, adds another piece of pickup business to almost no additional cost.

Some people believe that the community is based on private domain traffic and acquaintance business under LBS. The head of the community controls the business of the community. A community is well integrated, and the community in a region has similarities, but the linkage between regions Operations, and even linkages in different cities, future large-scale management will be a test for these players.